Bangladesh is improving in both economic and social spheres. The once-war-torn and economically vulnerable country is now a global development role model. The country’s biggest challenge right now is to maintain its current status while pursuing new objectives. Hence, one of the most significant strategies is to capitalise on the opportunities presented by the country’s geographic location. Because we live in the age of connectivity, advancements in the communications industry will lower the cost of doing business.
India, Bangladesh’s neighbour, now boasts a large economy. Furthermore, China, the world’s second-largest superpower, is a close neighbour. The majority of our imports come from these two countries. Bangladesh imports about USD 10 billion in commodities from China each year, and USD 6 billion from India. Bangladesh can readily export a wide range of goods to both of these nations. Exports to these countries, however, remain lower than imports. Of course, there are certain stumbling blocks. Therefore, we need to develop regional connectivity to solve this problem. The Bangladesh-China-India-Myanmar (BCIM) Economic Corridor, a regional economic corridor initiated by China, will provide this opportunity.
BRI: The resurrection of the old silk road
The Belt and Road Initiative (BRI), also known as One Belt One Road (OBOR), is a modernised version of the ancient silk road. It’s an effort to build something new on the foundation of something old. Beijing intends to make full use of all trade connectivity options available to it in order to retain its economic strength. For strategic reasons, China’s BRI project is instrumental to the development of Bangladesh.
This trade route was established by China during the Han dynasty in 200 BC, under the name of silk road or silk route. Not only Chinese traders but also traders from Turkey, Arabia, India, Iran, Syria, Armenia, used the silk road to trade with Central Asia, South Asia, Arabia, Europe and Africa. This road is known as the silk road because it was used to transport high-quality Chinese silk to countries all over the world.
BRI and BCIM
The British government decided to open the 2,000-year-old silk road in 1930. However, due to the outbreak of World War II, this could not be implemented. In 1999, China proclaimed the rebirth of the silk road in the commercial city of Kunming, nearly seven decades later. For the past 14 years, China has been working on the proposal.
BCIM is a part of China’s Belt and Road Initiative. The ancient silk road once improved the people’s living standards in the region. Through the Belt and Road Initiative, China hopes to revive the same prosperity. The only difference is that, in light of the current geo-economic situation, China intends to expand this corridor. As part of this effort, it is working on an economic land belt that will connect Central Asia, West Asia, the Middle East and Europe with countries that were once common in ancient silk road. China also intends to construct a maritime transportation network that will link its ports to the African coast.
Formal discussions about BCIM also started in 2013. On the 18th and 19th of December of that year, the four-nation delegation met for the first time in Beijing. The next year, on 17 and 18 December, Bangladesh, India, China and Myanmar participated in a two-day conference held in Cox’s Bazar. During that conference, the four countries signed joint minutes on BCIM Economic Corridor.
Investments will be dynamic
The four countries have been working on the BCIM Economic Corridor for several years. The BCIM countries have a population of 2.80 billion people and a combined GDP of USD 19 trillion. The BCIM Economic Corridor issue is being coordinated by China’s National Development Reforms Committee (NDRC). With the launch of the BCIM Economic Corridor, countries like Malaysia, Thailand, Cambodia will be able to get connected with Pakistan and Afghanistan.
During Chinese President Xi Jinping’s visit to Dhaka in 2016, a new chapter in China-Bangladesh relations began, with the signing of a memorandum of understanding and a development agreement worth approximately USD 24 billion. These development projects are included in the BRI initiative.
A study is being carried out to see what projects may be carried out as part of the BCIM Economic Corridor. A significant amount of infrastructure investment is required to construct a regional connectivity network. The AIIB was established with the primary goal of providing funds for infrastructure development. The initiative taken by China in establishing this bank is highly remarkable. Bangladesh is one of the more than fifty countries that have already joined.
Currently, trade between Bangladesh, China, India, and Myanmar is not as it is expected to be. Analysts say the BCIM Economic Corridor will be able to bring the necessary momentum to the trade of this region. According to a study by the Research and Information System for Developing Countries in India, this corridor can open the door to businesses worth USD 13.20 billion.
There are challenges to overcome
There are some obstacles to the implementation of BCIM Economic Corridor. First of all, there is a problem with accessing the market. In addition, non-tariff barriers, inadequate infrastructure and the absence of favourable banking and financial mechanisms among the associated countries could become problems. In order to ensure benefits from BCIM Economic Corridor, it is necessary to establish a well-balanced diplomatic relationship within the countries that are involved. This will not be an easy task.
Both the China-Pakistan Economic Corridor (CPEC) and the BCIM Economic Corridor are associated with BRI. The geopolitical relationship between the countries associated with these two initiatives isn’t very warm. As a result, it will be a little difficult to move forward with the two projects.
Due to India’s opposition, until May 2019, BCIM was not listed as a part of 35 corridors and projects affiliated with BRI. However, in the same year, by sending a representative to the 13th BCIM Forum, India revived this initiative.
Bangladesh will be benefitted
Bangladesh will be able to take advantage of the large market in this region via the silk road due to its strategic position and manpower. Just as Bangladesh is competing in the global market in the field of the textile industry, it will also have the opportunity to further develop the leather, information technology and shipbuilding industry through the use of silk road. Strengthening the transport network between Bangladesh, China, India and Myanmar will open up new possibilities for trade, investment, electricity and tourism. If the route goes through the southern part of Bangladesh, it will increase the business opportunities of the Chattogram area.
At present, it is costly to import goods from China to Bangladesh. Furthermore, due to high export costs, Bangladeshi products are unable to take advantage of the Chinese market. This corridor will partially address India’s demand for a transit route through Bangladesh to transfer products to several states in the northeast of the country.
According to a study on BCIM conducted by Asia Pacific Research and Training Network on Trade, if trade between the four countries is partially liberalised, it will be possible for Bangladesh to get access to duty-free trade worth at least Tk 3,120 crore and the maximum benefit will be Tk 5000 crore. In addition, trade between these four countries will increase by Tk 44,500 crore.
Research is being carried out in Bangladesh regarding the BCIM Economic Corridor. According to some research, the resurgence of the historic silk road will significantly reduce the lead time, which is a major factor in competitiveness in this rapidly changing world.
Expectations to solve the Rohingya problem
China believes that the implementation of the BCIM Economic Corridor will provide a solution to the ongoing Rohingya crisis. Mr Zhang Zou, the then ambassador of China to Bangladesh, mentioned this at a conference which was held in Dhaka in May 2019. Beijing hopes that the implementation of the BCIM Economic Corridor will find a suitable solution to the problem. Mr Zhang Zou also mentioned that Bangladesh is becoming a respectable and important partner of the BRI initiative.
Conclusion
Due to its geographical location, Bangladesh has the opportunity to become a regional economic hub. With this objective in mind, Bangladesh has joined the BRI and BCIM Economic Corridor. Honourable Prime Minister Sheikh Hasina’s government has always emphasised regional goodwill and economic integration. The Prime Minister thinks that the whole world has become a global village and for this reason, there is no alternative to increasing connectivity for the development of the country’s economy. The BRI or BCIM Economic Corridor will improve this connectivity, which will benefit all the associated countries.
Any regional project will face a number of challenges in its implementation. Obstacles arise as a result of strategic, economic, political, and ethical disagreements. These obstacles can be overcome through diplomatic discussions and activities. This is true in the case of the BCIM Economic Corridor, too. Bangladesh believes that if there is a new challenge in the way of implementing the BCIM Economic Corridor, it will be possible to deal with it through mutual understanding.
If the BCIM Economic Corridor is implemented, the pace of development in Bangladesh will be further accelerated. The construction of this connectivity network will necessitate significant infrastructure investment, which will result in numerous job opportunities. In other words, BCIM Economic Corridor will make a significant contribution to the GDP of the country. For this reason, we expect that the BCIM Economic Corridor will be successfully implemented by overcoming all challenges.
